Visa 2015 Annual Report Download - page 134

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
The Company’s fiscal 2009, 2010 and 2011 U.S. federal income tax returns are currently under
Internal Revenue Service (“IRS”) examination. The Company has filed a federal refund claim for fiscal
year 2008, which is also currently under IRS examination. Except for the refund claim, the federal
statutes of limitations have expired for fiscal years prior to 2009. The Company’s fiscal 2006, 2007 and
2008 California tax returns are currently under examination. Except for certain outstanding refund
claims, the California statutes of limitations have expired for fiscal years prior to 2006.
During fiscal 2013, the Canada Revenue Agency (“CRA”) completed its examination of the
Company’s fiscal 2003 through 2009 Canadian tax returns and proposed certain assessments. Based
on the findings of its examination, the CRA also proposed certain assessments to the Company’s fiscal
2010 through 2014 Canadian tax returns. The Company filed notices of objection against these
assessments and, in fiscal 2015, completed the appeals process without reaching a settlement with the
CRA. The Company intends to petition the Tax Court of Canada to overturn the CRA’s assessments,
and continues to believe that its income tax provision adequately reflects its obligations to the CRA.
The Company is also subject to examinations by various state and foreign tax authorities. All
material state and foreign tax matters have been concluded for years through fiscal 2002. The timing
and outcome of the final resolutions of the federal, state and foreign tax examinations and refund
claims are uncertain. As such, it is not reasonably possible to estimate the impact that the final
outcomes could have on the Company’s unrecognized tax benefits in the next 12 months.
Note 20—Legal Matters
The Company is party to various legal and regulatory proceedings. Some of these proceedings
involve complex claims that are subject to substantial uncertainties and unascertainable damages.
Accordingly, except as disclosed, the Company has not established reserves or ranges of possible loss
related to these proceedings, as at this time in the proceedings, the matters do not relate to a probable
loss and/or the amount or range of losses are not reasonably estimable. Although the Company
believes that it has strong defenses for the litigation and regulatory proceedings described below, it
could, in the future, incur judgments or fines or enter into settlements of claims that could have a
material adverse effect on the Company’s financial position, results of operations or cash flows. From
time to time, the Company may engage in settlement discussions or mediations with respect to one or
more of its outstanding litigation matters, either on its own behalf or collectively with other parties.
The litigation accrual is an estimate and is based on management’s understanding of its litigation
profile, the specifics of each case, advice of counsel to the extent appropriate and management’s best
estimate of incurred loss as of the balance sheet date.
The following table summarizes the activity related to accrued litigation.
Fiscal 2015 Fiscal 2014
(in millions)
Balance at October 1 ............................................. $ 1,456 $5
Reestablishment of obligation related to interchange multidistrict
litigation ....................................................... —1,056
Additional provision for legal matters ................................ 14 453
Payments on legal matters ........................................ (446) (58)
Balance at September 30 ......................................... $ 1,024 $ 1,456
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